A. Schulman Announces Long-Term Growth Targets At Investor Day
AKRON, Ohio, April 15, 2014 /PRNewswire/ -- A. Schulman, Inc. (Nasdaq-GS: SHLM) today highlighted several new financial targets for the fiscal 2014-2018 period, as disclosed in presentations made by management at its 2014 Investor Day in New York on April 10, 2014 and filed with Schulman's Form 8-K dated April 10, 2014.
"Our long-term targets are based largely on our expectations for continued success with our organic initiatives and acquisition strategy, combined with our financial strength and the growth potential of our global markets," said Joseph M. Gingo, Chairman, President and Chief Executive Officer. "We have fueled organic growth by introducing new products, expanding into new markets and improving our product mix. We have also completed eight acquisitions and formed three joint ventures within the past four years that have greatly strengthened our global position in key markets. And we have the global processes in place to achieve further cost savings along with our growth. As we continue our aggressive acquisition strategy and marketing initiatives, we are confident in our ability to achieve the growth targets we have set."
As announced at the Investor Day, on a non-GAAP basis, targets for the fiscal 2014-2018 period include:
- Sales: 10-11% compound annual growth (CAGR) to $3.6-3.7 billion for fiscal 2018
- Adjusted EBITDA: 17-18% CAGR to $270-284 million
- Adjusted earnings per share: 19-20% CAGR to $4.50-4.75
- Return on invested capital: 5.5-6.5% CAGR to 15-16%
- Dividend payout ratio target: 30% of adjusted net income
Slides used during the Investor Day presentations have also been posted in the Investors section of the Company's website at www.aschulman.com.
About A. Schulman, Inc.
A. Schulman, Inc. is a leading international supplier of high-performance plastic compounds and resins headquartered in Akron, Ohio. Since 1928, the Company has been providing innovative solutions to meet its customers' demanding requirements. The Company's customers span a wide range of markets such as packaging, mobility, building & construction, electronics & electrical, agriculture, personal care & hygiene, sports, leisure & home, custom services and others. The Company employs approximately 3,500 people and has 38 manufacturing facilities globally. A. Schulman reported net sales of $2.1 billion for the fiscal year ended August 31, 2013. Additional information about A. Schulman can be found at www.aschulman.com.
Use of Non-GAAP Financial Measures
This release includes certain financial information determined by methods other than in accordance with accounting principles generally accepted in the United States ("GAAP"). These non-GAAP financial measures include adjusted EBITDA, net income per diluted share excluding certain items, and return on invested capital. Return on invested capital is calculated as net operating profit after tax excluding certain items divided by total assets less cash, goodwill and noninterest bearing liabilities. These non-GAAP financial measures are considered relevant to aid analysis and understanding of the Company's results and business trends. However, non-GAAP measures are not in accordance with, nor are they a substitute for, GAAP measures. The most directly comparable GAAP financial measures for these purposes are net income from continuing operations, net income per diluted share, and return on invested capital calculated based on GAAP operating income. The Company's non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP financial measures, and should be read only in conjunction with the Company's consolidated financial statements prepared in accordance with GAAP.
While the Company believes that these non-GAAP financial measures provide useful supplemental information to investors, there are very significant limitations associated with their use. These non-GAAP financial measures are not prepared in accordance with GAAP, may not be reported by all of the Company's competitors and may not be directly comparable to similarly titled measures of the Company's competitors due to potential differences in the exact method of calculation. The Company compensates for these limitations by using these non-GAAP financial measures as supplements to GAAP financial measures and by reviewing the reconciliations of the non-GAAP financial measures to their most comparable GAAP financial measures.
A number of the matters discussed in this document that are not historical or current facts deal with potential future circumstances and developments and may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the fact that they do not relate strictly to historic or current facts and relate to future events and expectations. Forward-looking statements contain such words as "anticipate," "estimate," "expect," "project," "intend," "plan," "believe," and other words and terms of similar meaning in connection with any discussion of future operating or financial performance. Forward-looking statements are based on management's current expectations and include known and unknown risks, uncertainties and other factors, many of which management is unable to predict or control, that may cause actual results, performance or achievements to differ materially from those expressed or implied in the forward-looking statements. Important factors that could cause actual results to differ materially from those suggested by these forward-looking statements, and that could adversely affect the Company's future financial performance, include, but are not limited to, the following:
- worldwide and regional economic, business and political conditions, including continuing economic uncertainties in some or all of the Company's major product markets or countries where the Company has operations;
- the effectiveness of the Company's efforts to improve operating margins through sales growth, price increases, productivity gains, and improved purchasing techniques;
- competitive factors, including intense price competition;
- fluctuations in the value of currencies in areas where the Company operates;
- volatility of prices and availability of the supply of energy and raw materials that are critical to the manufacture of the Company's products, particularly plastic resins derived from oil and natural gas;
- changes in customer demand and requirements;
- effectiveness of the Company to achieve the level of cost savings, productivity improvements, growth and other benefits anticipated from acquisitions, joint ventures and restructuring initiatives;
- escalation in the cost of providing employee health care;
- uncertainties regarding the resolution of pending and future litigation and other claims;
- the performance of the global automotive market as well as other markets served;
- further adverse changes in economic or industry conditions, including global supply and demand conditions and prices for products; and
- operating problems with our information systems as a result of system security failures such as viruses, computer "hackers" or other causes.
The risks and uncertainties identified above are not the only risks the Company faces. Additional risk factors that could affect the Company's performance are set forth in the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 2013. In addition, risks and uncertainties not presently known to the Company or that it believes to be immaterial also may adversely affect the Company. Should any known or unknown risks or uncertainties develop into actual events, or underlying assumptions prove inaccurate, these developments could have material adverse effects on the Company's business, financial condition and results of operations.
SOURCE A. Schulman, Inc.